European Commission takes robust position on intellectual property

Article 50: what next for international contracts?

On 6 September 2017 the EU Commission published its Position Paper on Intellectual Property for the purposes of the Brexit negotiations. Its primary focus is on ensuring that existing holders of EU IP rights (whether based in the remaining EU27 states or in the UK) will continue to have UK protection after Brexit.

While this is likely to be welcomed by rightholders and also generally accords with the approach taken by the UK Intellectual Property Office so far, some aspects of the paper, if implemented, would involve significant administrative burdens for the UK and the negotiations have a long way to go.

Some may be disappointed that the paper does not address the proposed Unified Patent and Unified Patents Court.  This is unsurprising, however, given its focus on the consequences of withdrawal rather than on future rights.

The Commission’s Position: 

Unitary EU rights

Unitary rights are single rights enforceable across all 28 Member States of the EU, which will no longer cover the UK after Brexit. The Commission’s position is that, at Brexit, existing owners of such rights should automatically obtain comparable UK national rights at no extra cost. Any administrative burden for such rightholders should also be kept to a strict minimum.

Unitary rights include EU trade marks (EUTMs), Community design rights and Community plant variety rights; as well as geographical indications and designations of origin and other protected terms relating to agricultural products (referred to below as “geographical indications etc.”).

EUTMs

In the case of EUTMs the Commission specifies that UK national rights should not be refused for lack of use in the UK prior to the withdrawal date. In addition, if at Brexit an EUTM has a reputation in the EU but not in the UK, the national UK mark should nevertheless be treated as having a reputation in the UK for a temporary period, allowing the owner time to build up a UK reputation. (Having a reputation gives the owner broader rights against infringers, including the right to object to use by a third party which takes unfair advantage of the registered mark but does not confuse.)

Geographical indications etc.

Well-known geographical indications include Parma Ham, Champagne, Melton Mowbray and Scotch Whisky. The position paper points out that there is currently no UK domestic legislation protecting geographical indications etc. and it requires the UK to provide for their continued protection in the UK post Brexit.

Applications

Where an application for a unitary right is pending at Brexit the applicant should be entitled to keep the benefit of any priority date if they apply for an equivalent national UK right after Brexit.

Supplementary protection certificates (SPCs)

SPCs are, broadly, patent extensions available in relation to pharmaceutical patents in some circumstances. They are granted by national patent offices under an EU regulation. Where an application for an SPC (or an SPC extension) is pending before the UK IPO under EU rules at Brexit any SPC granted in the UK (or any such extension) should provide protection equivalent to that provided under EU law.

Database rights

Database right is an unregistered right which was introduced across the EU by means of an EU directive in 1998, and, as the name implies, protects databases. With some exceptions, the database right is currently only available to nationals of and those habitually resident in and to companies based in EU Member States. The Commission’s position is that existing database right holders in the remaining 27 EU Member States should continue to be protected in the UK post Brexit; conversely, existing UK database holders should continue to be protected in the 27 states also. 

Exhaustion of rights 

Finally, the position paper provides that rights exhausted in the EU prior to the withdrawal date should remain exhausted both in EU27 territory and in the UK. This means, for example, that trade marked goods put onto the EU market before Brexit with the trade mark owner’s consent should be able to circulate freely on the EU market after Brexit. 

The Consequences

Much of this is uncontentious and to be welcomed.  However, significant administrative burdens are likely to be involved in particular in setting up a UK domestic regime to protect geographical indications etc. and in relation to the automatic registration of UK national trade marks and design rights at no extra cost: the popular IP blog IPKat estimates that automatic registration of EUTMs would triple the number trade marks on the UK register at a stroke. So these are potential areas of contention, although the UK IPO is in fact already considering automatic registration as an option. 

On the question of exhaustion, the Commission’s position can be seen as logical in terms of withdrawal. In practice it may, however, be difficult for traders to tell the difference between goods originally put on the market before and after Brexit. The question also arises as to how this will fit in with any trade deal that may be negotiated.
 

Contact our experts for further advice

Camille Arnold, Astrid Arnold

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